Legal regulations continue to make an impact on the cryptocurrency markets in 2023. This time, the attention is on a bill approved by California Governor Gavin Newsom. According to the bill, stricter regulations will be imposed on businesses providing cryptocurrency services in the region starting from July 2025.
Another Regulation in the Crypto Sector
In a statement released on October 13, Governor Newsom announced that both individuals and companies must obtain a license from the Department of Financial Protection and Innovation (DFPI) to engage in cryptocurrency asset business activities, along with the Cryptocurrency Financial Assets Act.
According to the provisions in the bill, banking and transfer services are prohibited from operating without a license issued by DFPI officials. This decision addresses California’s money transfer laws. Additionally, the new cryptocurrency bill requires DFPI to impose strict auditing requirements on companies providing cryptocurrency services. Furthermore, companies will be compelled to fulfill registration requirements. The statement by the institution included the following:
“This bill will require a licensee to maintain certain records, including at least monthly ledger listing all of the licensee’s assets, liabilities, capital, income, and expenses, from the date of licensure for a period of five years.”
The Bill Was Reconsidered
The announcement also stated that companies that fail to comply with the bill will face sanction measures. In 2022, Governor Newsom refused to sign a similar bill aimed at creating a licensing and regulatory framework for cryptocurrency assets in California.
The bill passed the California State Assembly last year without opposition. Governor Newsom argued that the bill was not flexible enough to keep up with rapidly changing cryptocurrency trends. He also stated that he would wait for federal regulations to be implemented before initiating licensing efforts in the cryptocurrency sector.
Rohit Chopra, Director of the Consumer Financial Protection Bureau, recently expressed the intention to grant authority in order to reduce the harm caused to investors by mistakes, hacking attacks, and unauthorized transfers in the sector.
